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10 Things You Shouldn't Try To Impress VC's or Angels With Add a comment »
I've worked with a lot of companies over the years, and heard plenty of the same over and over. The reality is most of it either isn't true, or is true but not worthy of bragging about. The worst is when the entire pitch revolves around one or more of these... try to avoid looking like a rookie at your investor meetings:
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Our projections are conservative. 9 out of 10 times companies say that. If that's the case, you didn't forecast properly. Forecast how you actually expect to perform.
Our market is estimated to be $100B this year. It seems that everyone's market is in the billions these days. If you have legit market research to back up your claims, so be it. Otherwise don't bolster the market size, most investors will have a feel on whether the market is there or not.
We've had lots of customer interest and several orders on deck. Worry about bragging about that once you have signed orders/contracts. Even if there is sincere interest from customers, it doesn't mean they'll come through.
We have several employees lined up to join us post-funding that will make this fly. If you have signed commitment letters, great, if not then it was probably not as solid to the potential employee as it was to you.
We have no competitors. You may have a brand new product, it doesn't mean you have no competition. Competition doesn't have to be doing exactly what you are doing. Don't try to make your proposition seem more solid bc no one else does it, instead show that you recognize the potential threats.
No one else can do what we do. Really? More often than not where I hear that it brings me great joy to rattle off some names of companies who already are doing what they do and/or are hot on their heels.
We have had lots of investor interest and are looking for the right fit. It's the same as telling a girl you have plenty of girls interested in dating you, but you'll consider dating her. At that point you've mentally closed the door, go be someone elses problem.
We only are going for 1% of the market since it's so huge. From a numbers perspective that may work out, but no one wants to invest in a company whose greatest ambition is 1% of the market.
The big guys can't move fast enough to enter our market. Rookie move, you'll only come off as arrogant and foolish.
Our management team has a proven track record. That may be the case, but again management alone doesn't make a company. It's important to emphasize people's strengths and what they bring to the company, but don't imply that's what will make the company a success alone.
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So there you have it, a few rookie moves everyone makes, but with some common sense hopefully you won't. My best advice: talk intelligently about your company, show you've done your research, don't try to brag, admit any flaws, and demonstrate how you'll over come them.
Chris Benjamin, Rogue CFO
www.roguecfo.com; chrisb@roguecfo.com
By Chris Benjamin, Rogue CFO and Small Business Consultant. Outsourced CFO for your company.c@roguecfo.com http://www.roguecfo.com -
